By Eva Kuehnen
FRANKFURT, May 28 (Reuters) - Technology and chemical stocks
propelled European shares higher on Wednesday as the oil price
hovered near $129 a barrel during European trading hours,
soothing investors' concerns about the economic outlook.
Among major movers, shares in Deutsche Post <DPWGn.DE> fell
5.4 percent after the German mail group said it planned a
partnership with rival United Parcel Service <UPS.N> as part of
a restructuring of its DHL Express business in the U.S.
UPS shares rose 3.5 percent in the New York.
The pan-European FTSEurofirst 300 index <> closed up
0.9 percent at 1,326.69 points after three days of losses.
"After dumping stocks without discrimination in the first
part of the year, we're now entering a phase where investors are
trying to make the distinction between stocks that will show
good resilience in an economic downturn, and the others," said
Jean-Luc Buchalet, CEO of Pythagore Investissement, in Paris.
The DJ Stoxx European technology index <.SX8P> rose 2.2
percent, with German software company SAP AG <SAPG.DE> up 4.8
percent, helped by an upgrade from Cheuvreux. Cap Gemini
<CAPP.PA> rose 4.8 percent, and Alcatel-Lucent <ALUA.PA> added
3.1 percent.
"The positive sentiment was triggered by declining oil
prices," said Christian Stocker, equity strategist at UniCredit
Global Research.
U.S. crude <CLc1> dropped $3.34 on Tuesday and hovered
around $129 a barrel during European trading hours.
The oil price hit a record high last week above $135. The
price of oil, up more than 30 percent this year, has fed
concerns about consumer spending and inflation.
European chemical shares were the best-performing sector
after Dow Chemical <DOW.N> said it was hiking prices on all
products by up to 20 percent.
The DJ Stoxx European chemical index <.SX4P> rose 2.3
percent, led by Clariant <CLN.VX>, up 4.3 percent, Bayer AG
<BAYG.DE>, up 3 percent, BASF <BASF.DE>, up 1.5 percent, and
Ciba Holding AG <CIBN.VX> up 2.5 percent.
BANKS SEEN LAGGING
Shares in Royal Bank of Scotland <RBS.L> fell after Italy's
Generali <GASI.MI> dropped out of the running for RBS's
insurance arm, just hours ahead of a first bid deadline,
prompting speculation that interest in the asset is fading.
Other banks such as Lloyds TSB <LLOY.L>, HBOS <HBOS.L> and
Barclays <BARC.L> also fell.
"Everyone is careful in the run-up to U.S. banks reporting
second-quarter results from mid June. Until then, I think banks
will lag behind," Stocker said.
Nonetheless, the DJ Stoxx index of European insurers <.SXIP>
gained 1.8 percent with France's Axa <AXAF.PA> up 2.6 percent,
Allianz <ALVG.DE> rising 1.6 percent and Munich Re <MUVGn.DE> up
1.5 percent.
(Additional reporting Amanda Cooper in London and Blaise
Robinson in Paris, editing by Will Waterman)
